Erratic Power Supply and The Economy: The Minister’s Conclusion is Faulty

The narrative of many industrial nations today is that the availability of electricity, as a form of energy, is a most important determinant of their economic growth. Thus they devote considerable resources and attention to ensure very reliable power supply. But Nigeria Minister for Power, Works and Housing, Mr. Babatunde Fasola (SAN), in a reverse logic, stated recently that the erratic nature and non-availability of electric power supply in Nigeria IS NOT the reason why the country’s economy is not growing. The remark was said to have been made at a civil society engagement workshop on the Power Sector Recovery Programme in Abuja on Wednesday 31 January, 2018.

According to Punch Newspaper, two reasons were advanced by the Minister to support his position. One was that at the time when we had less power in 2013 and 2014, the economy of the country was growing at seven per cent per annum. As a second reason, he stated that some industrialised nations of the world were still faced with power supply problems, and yet Nigeria was importing goods from such countries, indicating that in spite of their power issues they could still grow their respective economies. India was cited as an example.

It is very important to critically evaluate the correctness of this conclusion for two main reasons: first, many people would readily accept this impression as accurate and conclusive with an official finality because it was made by the Minister in charge of power; second, the conclusion is actually faulty because it is laden with a lot of false assumptions. Many informed professionals around the world are listening to us.

First, it is a fallacy to state that there is more power in the country now than there was in 2013 and 2014. While it may be fairly correct to state that the power available on the national grid has increased from the average of 2800MW in 2013 to 3800MW in 2018, it is preposterous and represents an error of judgment to use that fact as the basis to conclude, within subsisting context, that the country now has more power. Electric power used in Nigeria does not come from the national grid alone. Facts reveal that a very significant number of individuals and companies get their power off the grid, through the use of diesel or petrol engines or, in the case of large industrial complexes, gas fired turbines. For instance, Manufacturers’ Association of Nigeria, MAN, estimates that a total of 13,000MW of self-generation is done by its members to cater for its energy needs. The apparent rise in peak demand on the grid may not be unconnected to an increase in the number of such individuals and companies that are occasionally resorting to the use of the grid as alternative source. It however does not reflect that the net power in the country has really increased. In fact, going by the alarming rate at which companies have become bankrupt in recent time, resulting in serious job cuts and unemployment, total power consumption in the country may have dropped.

Second, power availability and, by extension economic growth, is better evaluated, not on the basis of peak power demand, measured in kilowatts (KW) but on actual energy consumption which is measured in kilowatts-hour (KWH). It is about the number of hours, that is, how long electricity is available for use by consumers, especially for industrial and commercial purposes. When the Minister stated that “we have 7,000MW and we are selling 5,000MW”, the figures quoted represent the highest level of power the grid can presently supply (known as available generation capacity) and the highest level of power ever supplied (actual peak generation) respectively. These figures say nothing about how long that level of power is available for use. Peak value of power which we readily take pleasure to celebrate occurs at an instant of time. In many cases, the peak demand occasionally attained on the national grid is never sustained for long for a number of reasons we are not unfamiliar with. Did the minister consider the frequent incidents of system collapse, or the issue of network reliability, especially at the distribution sector usually referred to as “the last dirty mile”, with all the cobwebs of aging lines and other infrastructure? Available generation capacity or peak power demand may be rising. The question is: are people consuming more energy in spite of this increase? Not necessarily.  And again, how much of this grid consumption represents industrial loads? If industries are not getting as much energy as required, economic growth would stall.

Furthermore, the amount of energy actually delivered to a consumer is not only a product of the availability of power, that is how long electricity has been flowing to the consumer, but also a product of the quality of that power, particularly the voltage. Let me break it down for better clarity. (By the way, voltage refers to the force that drives electricity through the wires. It is analogous to the pressure that forces water through pipes). When power is supplied, regulations require that it should be done at the right voltage. Two fundamental things can happen when the voltage is low, which is the case at most times. The first is that the power becomes useless because it is not forceful enough to drive compressors, motors, electric furnaces, air-conditioners, refrigerators and blenders. The second is that consumers would not have consumed as much energy for the same length of time were the voltage be at correct nominal value.  The voltage measured from the consumer terminals at my office at Ikorodu, Lagos has been at an average of 150V most of the time as against the nominal 230V. I am not consuming as much power as Ikeja Electric is assuming for me, and therefore, billing me on faulty estimation. (Well, that’s another topic for another day). The experience of many other consumers is not dissimilar.

The Minister also alluded to the fact that countries like India are still grappling with power problems, yet Nigeria imports goods from them, indicating that Indian economy, like the others, are booming in spite of their power problem. However, what the minister failed to disclose is the nature of the power problems in those countries. Most often, the problems with the electricity supply of those countries do not border on sufficiency, availability and quality. They have resolved such fundamental issues of power to a large extent. The power challenges in those places have to do with grid modernization, integrating their variable distributed energy resources and renewable for greater efficiency, reducing their Aggregate Technical, Commercial and Collection losses and lowering the cost of power. The available generation capacity in India today stands at over 230,000MW, fifty-times more than is available in Nigeria while electricity per capita is 570 as against 120 in Nigeria. India is planning to increase its installed capacity to 440,000MW by the year 2020 in response to power demand from its manufacturing sector as evaluated on the strength of its GDP growth of 12% per annum. Evidently, they believe that electricity plays a key role in economic development.

Electric power supply is certainly a very major factor of economic growth. Every economy requires energy to grow and electrical energy is one of such energy forms. It is most preferred today for many obvious reasons not limited to cost, safety, versatility in conversion, efficiency of transportation, etc. We presently live in the electric age and it is going to be here for a long time. In Nigeria, there is still a long way to go and so much to do to have spare time to celebrate a paltry increase of 1000MW for a period of five years. Past administrations have bungled many opportunities and wasted time in developing the power sector. I hope this present one is not already falling into the same booby traps.  All efforts should therefore be seriously and sincerely devoted to improving the power situation in the Nigeria and rescue the ailing economy. When there is a perceived improvement in network reliability and supply quality, more industrial consumers will latch on to the grid because in the final analysis, electricity from the grid is cheaper in cost. This in turn will reinforce the growth of the economy.

Oluleye Akinmodiro

Power System Consultant & CEO, Dielectra Technologies LTD

leye@dielectratechnologies.com (07032784024)

 

 

 

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Posted by Leye Akinmodiro